The purpose of this paper is to investigate in detail the dynamics of a simple model with heterogeneous capital goods under alternative assumptions about expectations formation and saving. Before investment takes place, the entrepreneur has a choice over a large number (to be precise, a continuum) of types of machines; those which require more resources today require less labor per unit of output in the future. But once the machine has been constructed, it cannot be altered. This model raises, moreover, the interesting problem of economic obsolescence: machines may be constructed which subsequently, because of higher wage rates, are no longer profitable to operate. We shall be interested in determining how the dynamic behavior of this economy differs from that of the economy with malleable capital, as analyzed by Solow (1956) and Swan (1956) for the descriptive growth model and by Ramsey (1928) for the optimal growth model. It will be shown that, although there are fundamental differences in short-run behavior, in the long run the economy evolves much like the economy described by the simpler malleable capital models. On the other hand, econometric estimation based on the use of the malleable capital model, such as that of Solow (1957) in estimating the residual, or Arrow, Chenery, Minhas, and Solow (1961) in estimating the elasticity of substitution, may encounter serious biases from the specification error.

This study explores the following question: Does a worker's relationship to technology and degree of job specialization influence in a predictable way his integration into or alienation from work? The book shows that the degree of differentiation in the division of labor is related to technology in a similar manner in both the office and factory and that automated technology reduces the levels of alienation among both office employees and factory workers. The author samples three man-machine relationships in the office and factory: (1) workers in non-mechanized production systems; (2) machine operators in mechanized production systems; and (3) operators or monitors in automated production systems. In addition to separate chapters on office and factory workers, one chapter compares degrees and types of alienation among office employees as compared to factory workers.This book is one of the last in a series of research studies on the impact of computers completed by the Industrial Relations Section of the Alfred P. Sloan School of Management at M.I.T. In a foreword to the book, Charles A. Myers notes that important study puts to rest extreme fears about the alienation of workers as a consequence of automation. Professor Shepard's study provides new insights about the impact of advanced mechanization and automation in offices, which computers and allied information technology are invading at a rapid rate...As a sociologist among economists, [he] has brought fresh perspective to this series of research reports.